Correlation Between Logan Ridge and Artisan Partners

Can any of the company-specific risk be diversified away by investing in both Logan Ridge and Artisan Partners at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Logan Ridge and Artisan Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Logan Ridge Finance and Artisan Partners Asset, you can compare the effects of market volatilities on Logan Ridge and Artisan Partners and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Logan Ridge with a short position of Artisan Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logan Ridge and Artisan Partners.

Diversification Opportunities for Logan Ridge and Artisan Partners

0.83

Correlation Coefficient

Logan Ridge  Artisan Partners

Very poor diversification

The 3 months correlation between Logan and Artisan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Artisan Partners Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Partners Asset and Logan Ridge is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Logan Ridge Finance are associated (or correlated) with Artisan Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Partners Asset has no effect on the direction of Logan Ridge i.e., Logan Ridge and Artisan Partners go up and down completely randomly.

Pair Corralation between Logan Ridge and Artisan Partners

Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 0.98 times more return on investment than Artisan Partners. However, Logan Ridge Finance is 1.02 times less risky than Artisan Partners. It trades about 0.19 of its potential returns per unit of risk. Artisan Partners Asset is currently generating about 0.18 per unit of risk. If you would invest  2,121  in Logan Ridge Finance on September 2, 2024 and sell it today you would earn a total of  479.00  from holding Logan Ridge Finance or generate 22.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Logan Ridge Finance  vs.  Artisan Partners Asset

Logan Ridge Finance

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Logan Ridge exhibited solid returns over the last few months and may actually be approaching a breakup point.

Artisan Partners Asset

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Artisan Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Logan Ridge and Artisan Partners

The main advantage of trading using opposite Logan Ridge and Artisan Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logan Ridge position performs unexpectedly, Artisan Partners can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Artisan Partners will offset losses from the drop in Artisan Partners' long position.

The idea behind Logan Ridge Finance and Artisan Partners Asset pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.